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Paulucci heirs look to end battle over estate

Jeno Paulucci sits in his Duluth office in Canal Park in May 2009. The Paulucci family has reached a potential settlement in his estate, according to court records. Paulucci died in 2011.

A food fortune feud is starting to ring up an awfully large tab.

Since Jeno and Lois Paulucci died in 2011, their heirs and trustees have drained millions of dollars from the estate fighting over the family finances.

Now, according to court filings, the Paulucci family has reached a potential settlement that could end the bitter battle at last.

"Despite nearly five years of litigation, it is anybody's guess how whatever might remain of the residue of the trusts and estates would be distributed and administered if the litigation were pursued to its conclusion," reads a settlement petition filed earlier this year in a Seminole County, Florida, court.

In other words, the wealth amassed by the late Northland businessman and his wife might be reduced to pennies if there is no end to the fighting, those seeking the settlement argue — because then what would the fight be for.

"If the litigation continues, there is a risk that it will exhaust the remaining assets of the trusts and estates," reads the settlement filing.

It will be up to an Eighteenth Judicial Circuit Court judge in Florida whether to accept the settlement following a hearing March 17, but even if the lawsuits end the acrimony may well remain.

Finding consensus

Jeno Paulucci grew up in Hibbing and made a fortune in frozen foods and real estate. He died Nov. 24, 2011, at 93 years old. His wife, Lois, had died four days earlier at 89.

Several weeks before the two died, they made final changes to their trusts, putting new trustees in control and sparking a court battle involving allegations of undue influence, lack of capacity and other issues.

Now the family is poised to drop those allegations and have the trustees — Florida state Sen. David Simmons and Larry Nelson, president of Paulucci International Ltd. and personal representative of the Paulucci estates — replaced.

The settlement says the trust will pay the two $1 million, protect them from future lawsuits and pay remaining legal fees out of the estate.

That's on top of the $3.6 million Simmons and Nelson have collected in trustees' fees and more than $10 million in trust money they've spent on legal fees in the past five years, court documents show.

Replacing the trustees had long been a goal of the heirs, but other issues seemed to get in the way of a consensus among the family and other stakeholders in the trust, according to court filings.

It would appear that with all heirs on board, the trustees could be removed and the settlement made legally binding, though it's unclear whether a judge could order the settlement as written and if Simmons and Nelson would try to oppose it. If they do, the $1 million payment to them would be voided, according to the settlement agreement.

"While we do not generally comment on pending litigation, we can state the parties are attempting to privately resolve the matter," Terry C. Young, a lawyer for the trustees, wrote in an email.

Ready to settle

Court documents do not specify the current financial value of the trusts or how much the heirs have spent on lawyers and court fees, though with the urgency given to resolving the matter, funds may be dwindling. In all, 37 separate lawsuits were filed in Minnesota and Florida in the course of the legal wrangling over the estate.

"Fueled by a generous amount of litigant acrimony, the myriad of issues and side issues that permeate these disputes has resulted in very expensive litigation that has drained the Paulucci family wealth," the settlement reads.

The settlement was drafted by lawyers for Jeno and Lois Paulucci's three children, four grandchildren, 10 great-grandchildren "and unborn future lineal descendants."

Many concessions appear to be made for one of the three children, Gina Paulucci, including a $2.69 million loan from the original corpus of the Paulucci trusts for annual payments and a provision that there will be no contact between Gina and her siblings, Mick Paulucci and Cynthia Selton.

Mick Paulucci is co-founder of Grandma's Saloon and Grill and other businesses that are now Canal Park mainstays. He could not be reached for comment on this story.

It's unclear how soon a ruling on the settlement could come and what, if anything, could yet derail it.

The settlement agreement states that if it isn't approved by a court by the end of March 2019 it will be nullified.

Jeno Paulucci

Born in Aurora in 1918 and raised in Hibbing, Paulucci made his money from a variety of food and real estate ventures and was for a long time based in Duluth.

Chun King was a line of canned Chinese food that he founded in 1943 and sold for $63 million in 1966.

Jeno's Pizza Rolls, at one point Duluth's largest employer, was sold to Pillsbury for $135 million in 1985.

Heathrow, Fla., was a planned community outside Orlando that Paulucci built and sold for $50 million plus settlement money in 1992.

Paulucci bought Miller Hill State Bank, today known as Republic Bank, in 1986. The National Bank of Commerce in November announced it was looking to acquire a 49 percent stake of that bank for an undisclosed price.

In 1990 Paulucci founded frozen entree company Luigino's, which later became Michelina's and was sold as Bellisio Foods for an undisclosed price a day before Paulucci died in 2011. Last fall Bellisio sold to a Thai investor for more than $1 billion.

In a 2003 interview Paulucci said an estimate of his net worth at half a billion dollars was "in the ballpark."

Court documents show the Paulucci trusts include a great deal of property holdings in Florida and some in Minnesota.